What glories this capitalist free market thing hath wrought

There’s nothing worse than being exploited by some running lackey pig dog of a capitalist, as Deirdre McCloskey reminds us:

The aim of the true Liberal should not be equality but “lifting up those below him.” It is to be achieved not by redistribution but by free trade and compulsory education and women’s rights.

And it came to pass. In the UK since 1800, or Italy since 1900, or Hong Kong since 1950, real income per head has increased by a factor of anywhere from 15 to 100, depending on how one allows for the improved quality of steel girders and plate glass, medicine and economics.

In relative terms, the poorest people in the developed economies and billions in the poor countries have been the biggest beneficiaries. The rich became richer, true. But the poor have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, low child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university and respect.

Never had anything similar happened, not in the glory of Greece or the grandeur of Rome, not in ancient Egypt or medieval China. What I call The Great Enrichment is the main fact and finding of economic history.

It’s that penultimate sentence which is so important. There have most certainly been many attempts at designing economic systems: there have been even more that just sorta happened out of voluntary interactions. But there’s only one of them that has actually managed what we are all the lucky, lucky, beneficiaries of. That is, one economic method of organisation that has led to a substantial, sustained, increase in the standard of living of the average woman on the Clapham Omnibus.

Nothing else, nothing planned nor nothing unplanned, has managed this. And that really is the main fact and finding of economic history. It’s the one unique even in it too. McCloskey, you and I, we might differ on the details of how it all happened but we shouldn’t allow minor disagreements over precedence between the flea and the louse to obscure the manner in which we’re all feeding off that larger truth. That nothing else does work as well as those largely bourgeois virtues plus economic and social liberty.

The explosive economic growth of England, Italy or Hong Kong were not caused by liberals (or anybody else) “lifting up those below them” but by the individual selfish needs for higher status — most easily (and usually) attained by the possession of consumer goods that were hitherto in the possession of the status above one. Yes, as part of (and a cause of) economic growth we also have intellectual enlightenment and thus liberalism which realizes that society will never be at peace until everybody is able to rise — or at least find a role — in the social group in which he or she feels comfortable. I hive learned to be wary of “liberals”. When one gets to know them personally they turn out to have status ambitions as much as any man.

Tim and Deirdre are both right: poverty is a more important problem than inequality.
It wasn’t the desire for equality that drove Homo Sapiens and their immediate predecessors to developing speech and toolmaking from which human consumer products evolved, lifting them, albeit marginally, from the norms asssociated with the consumption possibilities of animals in nature.
Adam Smith lectured on these great transformations, hindered as he was by no knowledge of evolution or the circumstances and the millions of years and hundreds of millennia of pre-history involved, and without direct knowledge of modern anthropology and basic archeology, hence his summary efforts could not be taken any further by his student listeners:
“All other animals find their food in the state they desire it and that which is best suited ot their several naturrrse, and few othr necessaries do they stad in need of. But man, of a more delicate frame and more feeble constitution, meets with nothing so adapted to his use that it does not stand in need of improvement and preparation to fit for his own use” (Adam Smith (1662-3): Lectures on Jurisprudence, p. 334. vi.9).
It was and, is still, the unrelenting power of those needs for improvement to fit human use that drove human progresss and adaptation, or what Deirdre McCloskey calls the “Great Enrichment” that defines “the the main fact and finding of economic history”, (includng of course our pre-history).

I’m inclined to think that for capitalism to work requires a certain basic standard of education; otherwise people can’t make the rational decisions that are supposed to optimise their welfare. And historically speaking, universal education tends to follow the establishment of a democracy and universal suffrage. It’s not hard to see why; politicians who want people to vote for them inevitably assume that they will do so if only they’re smart enough. So I don’t think you can simply impose capitalism on a population who are not ready for it. But having said that, I’m with you all the way.